It was China, whose gargantuan credit expansion, monetary easing and "Shanghai Accord" in early 2016 unleashed the global reflationary wave which central banks are currently mistaking for "growth." It is only appropriate that China will be the catalyst that ends it.
With analysts noting that markets are "taking the Fed's tightening policy in their stride," demand for emerging-markets debt is so strong that one of Asia's poorest nations is mulling a debut dollar-bond sale...
"Don’t let anyone try to tell you that stock-market pullbacks, including modest ones, are something investors and policy makers can now handle with aplomb. You can calculate financial-conditions indices with all sorts of back-fitted weightings but when stocks go down, everyone still goes into “The sky is falling” mode."
Barclays has created the following chart which lays out what "coordinated global renormalization" would look like. It can serve as a benchmark to those keeping tabs on where various central banks are in the current attempt to restore monetary normalcy.
Financial markets seem convinced that the recent surge in business and consumer confidence in the US economy will soon be reflected in “hard” data, such as GDP growth, business investment, consumption, and wages. But economists and policymakers are not so sure. (To some outside the US, it is an assumption that sometimes looks a lot like blind faith.)
China home prices rose last month in 11 more cities - 56 of 70 - as the government appears to have lost some of its recent enthusiasm in curbing prices and imposing restrictions on property transactions on concerns this may drastically impact the local Chinese "wealth effect."
"Anyone buying stocks based on confidence that the Fed has their back notwithstanding Wednesday’s action surely deserves the pounding just ahead. What Yellen had to say doesn’t even reach the status of babbling; it was flaming incoherence..."
"I've increasingly come to see the financial industry - with the big banks at its core - as the root cause of injustice in today's society." Whether it's social equity, the security of your job or retirement, your day-to-day existence, or the fairness of the laws we live under - our fate is currently in the hands of the banks.
A row appears to have broken out during today's G-20 meeting in Baden Baden, Germany - the first for the Trump administration - where the dominant topic is trade, and specifically how the "globalization vs protectionism" debate will look in a world where Donald Trump is president of the world's biggest economy.
The PBOC stressed that its interbank rate hikes simply followed the market's development, thus are not "true" policy rate hikes. Nevertheless, it also listed four classical rate-hike reasons for the interbank rate changes: the economic recovery, rising inflation (particularly that of housing), strong credit growth and Fed's rate hikes.